Chile's CSAV cuts losses, pays fine ahead of merger

Friday, February 28, 2014

Chilean shipping firm Compañía Sudamericana de Vapores (CSAV) cut losses 46% in 2013 thanks to lower expenses, and agreed to pay a fine to US authorities in an anti-trust investigation, ahead of its planned merger with rival Hapag Lloyd.

CSAV's net loss shrank to US$169mn in 2013 from US$314mn in 2012. Revenue declined 6.7% to US$3.2bn, but that impact was offset by a 5.3% reduction in sales costs and a 7% decline in administrative costs.

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"These results are in the context of a particularly complex year for the shipping industry, which has had to continue facing high volatility in freight rates and an overcapacity of ships," CSAV said in a statement.

CSAV - controlled by local group Luksic, one of Chile's wealthiest families - also said it agreed to pay a US$8.9mn fine to the US Department of Justice to settle an investigation of anti-trust practices in the car-carrier market between 2000 and 2012.

"During the investigation and, against the company's policies, conducts were detected contrary to free competition. As a result, it was decided to reach agreement with the American authority," CEO Oscar Hasbún said in a statement.

CSAV called a shareholder meeting for March 21 to approve a US$200mn capital increase and the company's merger with Hapag Lloyd, which would create the world's fourth largest shipping company.

Under the preliminary deal, Vapores will get a 30% stake in Hapag-Lloyd and will become the largest shareholder in the German company. The combined company will have annual sales of US$12bn and synergies of US$300mn.